As CMS unveils its 2026 final rule, the agency is doubling down on value-based care, making two-sided financial risk the organizing principle for Medicare payment and signaling a decisive shift in how performance and accountability will be measured and rewarded. These new policies have far-reaching implications for providers, health systems, and payers.
Two-sided risk becomes the norm
The launch of the mandatory Ambulatory Specialty Model (ASM) – beginning with heart failure and low back pain—and new restrictions on one-sided participation in the Medicare Shared Savings Program (MSSP) mark a turning point.1 By 2027, many clinicians and organizations are likely to be participating in performance-based risk arrangements.
Key implications:
- The universe of required participants is expanding, notably to include more specialists
- Payment adjustments will increasingly be shifting from budget-neutral pools to peer-based comparisons, resulting in more transparent performance measurement
- The stakes for cost and quality performance are rising, with financial outcomes directly tied to measurable results
Organizations must model their financial exposure and identify strategic opportunities within these new risk-based frameworks.
Clinician-level attribution: accountability gets personal
CMS is shifting the focus from organizations to individual clinicians, aligning incentives and performance measurement directly with National Provider Identifiers (NPIs). Whether through ASM, revised qualifying alternative payment model participant (QP) determinations, or updated attribution logic for evaluation and management (E/M) and specialty encounters, this change will require organizations to:
- Refine internal governance structures for performance management
- Ensure robust data capture and reporting at the clinician level
- Support clinicians as their eligibility for mandatory programs may change annually
It is an evolution that will require sophisticated analytic capabilities and flexible operational strategies to manage attribution, accountability, and engagement.
Health equity: Evolving incentives and integrated care
CMS refined or replaced terminology related to Social Determinants of Health, however, continues to include some elements of health equity under the renamed “population adjustment”. Screening for Social Drivers of Health was removed from the APM APP Plus measure set, while the Health Equity Adjustment in MSSP will be removed in 2026 with the reasoning that other scoring adjustments such as eCQM incentives and Complex Organization Adjustment (COA) adequately capture this information. CMS is embedding equity objectives through the newly named “Population Adjustment” through funding mechanisms related to payment for services, rather than quality measurement and case mix considerations, such as in the ASM scoring. The ongoing emphasis on integrated primary and behavioral health is reinforced by new Advanced Primary Care management codes, further aligning incentives with whole-person care and chronic disease management.
Organizations serving underserved and complex populations should continue to prioritize equity-oriented strategies to maximize both patient outcomes and payment and coding changes not directly captured in quality measurement.
Quality reporting: Universal expectations
CMS is increasingly standardizing quality reporting requirements across value-based programs, including MSSP, MIPS and select Alternative Payment Models (APMs). While the requirements are not fully uniform across all programs, providers are expected to demonstrate stronger measurement rigor including completeness, benchmarking, and performance reporting demonstrating:
- Aggregation across TINs
- Clinician-level performance drill downs
- Increased reliance on third-party data sources, including registries, analytics vendors and data aggregators
Additional policy highlights
- Payment & valuation reform: Updates to payment rates, efficiency adjustments, and practice expense methodologies will redistribute revenue across specialties and care settings. Organizations must assess financial impacts and develop strategies for APM participation.
- Virtual care expansion: Permanent telehealth supervision and streamlined oversight support flexible care delivery models, impacting staffing, site-of-service strategy, and network adequacy
- Integrated primary and behavioral health: New codes and expanded digital mental health coverage create opportunities for enhanced ROI
- Cost control & drug/device payment overhauls: Restructured reimbursement for skin substitutes, greater drug pricing transparency, and clarified gene/cell therapy payment rules will require close monitoring of specialty spend
How Milliman MedInsight supports success
The Milliman MedInsight analytics platform is designed to help organizations navigate these changes with confidence –and key capabilities.
Financial impact modeling: Quantify the impact of payment reform and risk arrangements on revenue. With payment and valuation reforms redistributing revenue across specialties, MedInsight’s advanced analytics enable organizations to model the financial impact of new Relative Value Unit (RVU) calculations, practice expense (PE) updates, and efficiency adjustments, among other capabilities.
- Simulate various risk scenarios, including two-sided risk arrangements
- Forecast the impact of APM participation on organizational revenue
Performance analytics: Drive improvement at both the organizational and provider level to drill down to individual NPI performance across cost, quality and utilization measures.
- Multi-level performance reporting for MSSP, ASM, MIPS and other programs and benchmarking to support some programs
- Identify high and low performers, target interventions, and monitor progress over time
- Support internal governance and incentive alignment
Ensure compliance, manage cost and maximize incentives: Identify cost drivers, optimize utilization, and ensure compliance with new payment rules and heightened quality reporting standards.
- Aggregate data across Tax Identification Numbers (TINs) and care sites for comprehensive reporting
- Track & measure completeness and identify reporting gaps
- Streamline submissions and support audit readiness
Maximize ROI on whole-person care initiatives: As integrated primary and behavioral health models expand, MedInsight tools and analytics provide the insights you need.
- Identification of high-need, high-risk populations for care management
- Measurement of program impact on utilization, outcomes, and cost
- Evaluation of new codes and reimbursement opportunities for integrated services
Manage high-cost areas and reduce waste: With new scrutiny on drug, device, and specialty procedure costs, MedInsight provides analytics that let you drill down into cost.
- Pharmacy and specialty spend analytics to pinpoint cost drivers
- Utilization pattern analysis to identify outliers and savings opportunities
- Support for compliance with new transparency, pricing, and reporting requirements
Virtual care insights: Analyze telehealth adoption and outcomes to inform strategic decisions with MedInsight support.
- Telehealth adoption tracking by provider, service line, and population
- Comparative analysis of cost and outcomes between virtual and in-person care
- Network adequacy and staffing model insights to ensure access and efficiency
Advance equity and address social determinants: With CMS embedding health equity into payment and quality programs, MedInsight enables organizations to do more.
- Monitor performance on equity-related measures and population adjustments
- Identify possible disparities in access, quality, and outcomes for targeted improvement
How to thrive in the era of value-based care
The CMS 2026 Physician Fee Schedule final rule accelerates the transition to performance-based risk, clinician-level accountability, and integrated, equitable care. Organizations that invest in advanced analytics, robust governance, and flexible strategies will be best positioned to succeed in Medicare’s next era.
MedInsight’s comprehensive analytics platform equips healthcare organizations with the data-driven insights, benchmarking, and operational support needed to succeed under the CMS 2026 final rule. From financial forecasting to clinician engagement, quality reporting, and equity advancement, MedInsight can help your organization thrive in Medicare’s value-based future.
To learn more about how Milliman MedInsight can help you adapt and excel, contact us for a demo or consultation.
References:
1. Calendar Year (CY) 2026 Medicare Physician Fee Schedule Final Rule (CMS-1832-F) | CMS
